Bulgarian citizens who inherit property worldwide and foreign individuals who inherit movable and immovable property located in Bulgaria are subject to Bulgarian inheritance tax. Inheritance taxation in Bulgaria is governed by Articles 29 to 43 of the Local Taxes and Fees Law.

Who is paying inheritance tax?

The following persons are subject to inheritance tax: (1) legal heirs (i.e., deceased’s relatives and a spouse who inherit property by law), (2) testamentary heirs(i.e., deceased’s relatives and a spouse who inherit property by a will left by the deceased), and (3) legatees (i.e., non-relative beneficiaries).Bulgarian citizens are liable to pay inheritance tax on Bulgarian and foreign property. Foreign individuals are liable to pay Bulgarian inheritance tax if they inherit property located in Bulgaria.

The surviving spouse and deceased’s direct line relatives (e.g., children and parents) who inherit deceased’s propertyare exempted from paying inheritance tax on suchproperty.

Taxable amount

The taxable base for Bulgarian inheritance tax is equal to the value of the inherited property (e.g., an apartment, shares of a company, and a car). Such value is calculated on the date when the inheritance is disclosed. The value of deceased’s property is defined in the local currency, Bulgarian Leva (BGN), in the following manner:

  • Immovable property located in Bulgaria: at the value determined by a local municipal officer;
  • Immovable property located outside Bulgaria: at the value stated in a document issued by a relevant foreign tax authority;
  • Property in foreign currency: at the relevant exchange rate determined by the National Bank of Bulgaria;
  • Securities: at fair market value;
  • Vehicles: at insured value;
  • Other movable property: at fair market value;
  • Participation in commercial structures (e.g., shares of a company): at fair market value and other accountancy data.

Tax rates

The inheritance tax rates are set by each Bulgarian municipality within the limits defined by law.The first BGN 250.000 (about 128.000 EUR) of the value of the inherited property is exempted from taxation. The following inheritance tax rates apply to property which total value exceeds the general exemption of BGN 250.000:

  • 0,4% – 0,8% on inheritances received by siblings and children of siblings;
  • 3,3% – 6,6% on inheritances received by other beneficiaries.


Tax exemptions and reliefs

The following six types of inherited property are exempted from taxation: (1) property of a deceased who died in industrial accidents, natural disasters, or for the Republic of Bulgaria; (2) property transferred to Bulgaria or registered religious communities; (3) household furnishings; (4) books and musical instruments; (5) small farm implements; and (6) property located abroad for which applicable inheritance tax has been paid abroad. Moreover, the following items are debited from the assets of the taxable estate: (1) debts incurred by the deceased; (2) rights and receivables transferred by the heirs to a municipality or the State Treasury; and (3) deceased’s funeral expenses up to 1.000 BGN (about 512 EUR).

Inheritance administration formalities

The inheritance tax must be paid to the Bulgarian municipality in which the deceased was residing. If the deceased resided abroad, the municipality in which the largest part of inheritance is located is responsible for the collection of inheritance tax.

Within a time period of six months, the person who is liable to pay inheritance tax or his/her legal representative has to submit a declaration to the officials of the relevant Bulgarian municipality. The declaration should contain a list of the inherited items as well as their type, location, and value.

Persons who are liable to pay inheritance tax but fail to do so are subject to sanctions set by the Bulgarian Local Taxes and Fees Law. The sanctions include, but are not limited to,penalty interest and fines (10-500 BGN).